How to Start a PSARA LICENSE

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Overview of PSARA License Registration in India

Security has become a major concern in today’s world, leading to an increasing demand for personal security guards across various sectors such as banking, finance, IT, and more. To ensure public safety and prevent illegal activities in the name of private security services, the government introduced the PSARA License. This licensing system, along with its periodic renewals, helps regulate the private security industry and ensures its compliance with the law.

Since 2005, every private security service provider has been required to obtain a PSARA License in order to offer security services. This license must also be renewed every five years. PSARA stands for the Private Security Agencies Regulation Act, 2005, which governs agencies providing armed or unarmed security services as alternatives to the police. This regulatory measure was introduced for safety and to protect the public from illegal security operations.

The PSARA License is a prerequisite for any private security agency, and the government has set up a dedicated portal, the Private Security Agency Licensing Portal, for this purpose. It is not a one-time license—renewal is required periodically. If an agency is found to be violating the provisions of the PSARA Act, its license can even be suspended during the renewal process. As stipulated in Section 4 of the PSARA Act, no person or agency can operate without this license, making it essential for the legal operation of private security services.

What are Private Security Agencies?

Private Security Agencies are firms that provide security services, such as security guards, to businesses or individuals. These agencies not only deploy security personnel but also offer training to those seeking to become security guards.

What is a PSARA License?

A PSARA License is the government-issued authorization that allows private security agencies to legally provide security guard services and offer related training. This license serves as a legal requirement for the operation of private security businesses, ensuring they adhere to government standards and regulations.

Benefits of PSARA License

Here are the key benefits of obtaining a PSARA License:

  • Enhances the reliability and accountability of the agency.
  • Empowers the training company to operate effectively.
  • Attracts more customers to the business.
  • Builds goodwill and reputation in the market.
  • Helps establish trust with potential clients.
  • Increases the credibility of the agency.
  • Facilitates smooth operations within the organization.
  • Elevates the agency's responsibility towards its customers.
  • Provides customers with a sense of security and confidence

Eligibility Criteria for PSARA License

Eligible Business Entities:

  • Sole Proprietorship
  • One Person Company (individual entity)
  • Partnership Firms and LLPs
  • Various Associations
  • Private Limited Companies

Eligibility Criteria for Directors and Principal Officers:

  • Must be an Indian citizen
  • Must have attained the legal age of majority
  • Must possess sufficient financial resources to run the business
  • Must have a clean criminal record

Eligibility Criteria for Security Guards:

  • Must be an Indian citizen
  • Must be of legal age
  • Should not exceed the age of 65
  • Must have adequate training and experience
  • Must have a clean track record
  • Must possess the required physical strength
  • Should have a character certificate from previous employers

Documents Required for PSARA License and Renewal:

The documents required for both PSARA License and its Renewal are almost identical. Ensure the following documents are ready before applying:

  • Incorporation Certificate of the Company
  • Signed Memorandum of Understanding (MOU)
  • ID Proofs of all security guards, directors, and employees
  • Address proof of the registered office
  • Affidavit as per the Private Security Agencies (Regulation) Act, 2005
  • PAN details of the promoters
  • Company’s logo
  • Employees’ State Insurance (ESI) Registration
  • Proof of security guard training (affidavit can be used)
  • Provident Fund Documents
  • Two photographs of each promoter
  • Copy of Income Tax Returns of each director
  • Character certificates of all employees

Pre-Requisites for PSARA License:


 Before applying for a PSARA License, the following requirements must be fulfilled:

  • Allotment of PAN card
  • Registration with the Service Tax Department
  • Provident Fund Registration
  • Shops and Commercial Establishments License
  • Registration under the Contractual Labor Act
  • Employees' State Insurance (ESI) Registration
 
 
 
 
 

Procedure to Obtain PSARA License

The process for obtaining a PSARA License is outlined in the following steps:

Step 1: Gather All Required Documents
The first step is to collect all essential documents, including:

  • PAN (Permanent Account Number) Card
  • TAN (Tax Deduction Account Number)
  • GST (Goods and Services Tax) Registration
  • Provident Fund (PF) Registration
  • Employees’ State Insurance (ESI) Registration
  • Registration under the Shops and Establishment Act
  • Income Tax Return (ITR) of each director, shareholder, or partner Once all the documents are in order, you can proceed with filing the application online on the official portal. Using a digital signature streamlines the process.

Step 2: Memorandum of Understanding (MOU) with a Training Institute
It is mandatory for the applicant to sign an MOU with an accredited training institute that offers security guard training. The training institute must be approved by the state controlling authority. Special provisions are made for ex-servicemen in these training programs.

Step 3: Submit the Application
After completing the above steps, the applicant must file Form-I with the relevant state authority. This form should be accompanied by:

  • Form-II (Verification of Qualifications)
  • Form-III (Affidavit) All required documents should also be attached to the application.

Step 4: Police Verification
The applicant must request police verification using Form-I. If the agency is a company or partnership, all proposed directors must undergo police verification.

Step 5: Issuance of PSARA License
Once the police verification is completed and the application is approved, the state authority will either issue the PSARA License in Form-IV or reject it if there are any defaults.

Note: The entire process to obtain the PSARA License generally takes about 60 days from the date of application submission. The process may vary depending on the state.

The PSARA guidelines specify the qualifications and disqualifications for security guards. Additionally, applicants must hire supervisors to oversee the security guards. Preference is given to those with a minimum of three years' experience in the army, navy, or air force.

Pricing of PSARA License

The costs associated with obtaining a PSARA License can be broken down into three key areas:

  1. Government Fee
    A government fee is charged for each license issued. This fee can be paid via net banking or a debit/credit card. The fee structure is typically outlined in a table, which provides a clear breakdown of how the fee is calculated.

  2. Professional and Other Costs
    Companies often hire professionals to assist in obtaining the PSARA License, which incurs additional costs. These costs can include fees for services rendered by legal or consultancy professionals. Additionally, the process may involve visits to government departments and police stations, which also contribute to the overall cost.

  3. Training Costs
    Private security agencies must invest in training programs for their staff. This includes costs for enrolling in accredited training institutions, as well as signing a Memorandum of Understanding (MOU) with the institute. These expenses ensure that security personnel receive quality training and meet the necessary qualifications.

PSARA License Renewal

PSARA Licenses are valid for a period of 5 years. After this period, it is mandatory to renew the license. The renewal process follows a similar procedure to the initial application. Below are the steps involved in renewing the PSARA License:

  1. Step 1: Submit the PSARA License Renewal application to the Controlling Authority at least 45 days before the license expires.
  2. Step 2: The application must comply with the requirements of Section 6, 7, and 11 of the Private Security Agencies (Regulation) Act, 2005.
  3. Step 3: The Controlling Authority must review and decide on the renewal application within 30 days of receiving it.
  4. Step 4: The Controlling Authority will conduct an inquiry as part of the renewal process.
  5. Step 5: After the inquiry, the authority will either approve or deny the renewal request.
  6. Step 6: If the renewal is denied, the applicant will be given an opportunity to present their case, and the denial will be explained in a written order.
  7. Step 7: If the renewal is approved, the license will be extended for an additional 5 years.

It is important to note that PSARA License Renewal must be completed every 5 years to continue operating legally.

 
 
 

Suspension and Cancellation of PSARA License

Section 13 of the Private Security Agencies (Regulation) Act, 2005 outlines the conditions under which a PSARA license can be suspended or canceled. The controlling authority can take such actions on one or more of the following grounds:

  1. The license was obtained through misrepresentation.
  2. Suppression of material facts.
  3. Forgery involving documents or photographs.
  4. Violation of any provisions of the Private Security Agencies (Regulation) Act, 2005, or other mandatory compliance requirements.
  5. Misuse of information acquired during the discharge of duties.
  6. Misrepresentation of the agency as a government entity.
  7. Illegal use of the information on the license.
  8. Operating under a different name than the one registered.
  9. Representing or attempting to represent the agency as a public servant.
  10. Failure to commence operations or engage supervisors within the specified time.
  11. Failure to provide agreed-upon services to clients.
  12. Refusal to provide contracted services.
  13. Engaging in activities contrary to the law.
  14. Encouraging or facilitating unlawful acts.
  15. Security guards committing illegal acts, being negligent, intoxicated, or undisciplined while on duty.
  16. Any actions by the license holder that threaten national security, public order, or the rule of law.

Conditions for Suspension or Cancellation of PSARA License

Before suspending or canceling a license, the government must follow these steps:

  • The authority cannot immediately cancel the license; it must first issue a 30-day suspension order.
  • The private security agency must provide a reasonable explanation within 15 days as to why the suspension should not be extended to a cancellation.
  • All suspension or cancellation orders must be detailed and clearly stated.
  • A copy of the order must be given to the affected party.
  • The license holder must be given a reasonable opportunity to be heard before the cancellation of the license.

Right to Appeal Against Suspension or Cancellation

If a PSARA license holder disagrees with the suspension or cancellation order, they can file an appeal within 60 days from the date of the order. If the appeal is filed after the deadline, the license holder must provide a valid reason for the delay. The appeal should be submitted to the Home Secretary of the State Government, along with a copy of the suspension or cancellation order. The authority must provide the license holder with an opportunity to present their case before making a decision.

Guidelines to Avoid Suspension or Cancellation

To prevent the suspension or cancellation of a PSARA license, agencies should:

  • Adhere to all compliance requirements for PSARA licenses.
  • Stay updated on changes to the Private Security Agencies (Regulation) Act, 2005, and ensure full compliance.
  • Provide adequate training to security guards and supervisors.
  • Monitor guards closely to prevent misconduct that could lead to suspension or cancellation.
  • Avoid any attempts to defraud the government.

Penalties for Operating Without a Valid PSARA License

Under the Private Security Agencies (Regulation) Act, 2005, operating without a valid PSARA license or renewal, or using an unauthorized uniform, can result in significant penalties:

  • Agencies operating without a valid PSARA license may face imprisonment (up to 1 year), a fine (up to ₹25,000), or both.
  • Failure to renew the PSARA license on time can lead to the same penalties.
  • If security guards or supervisors wear unauthorized uniforms, they can face imprisonment (up to 1 year), a fine (up to ₹5,000), or both.

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Conclusion

The PSARA License and its timely renewal are mandatory for private security agencies. Operating without a valid PSARA license or renewal can result in severe penalties. The government provides this license to ensure the security and regulation of private security services. Suspension or cancellation of a PSARA license ensures that security agencies operate within the legal framework and do not engage in illegal activities. The process of suspension or cancellation is appealable, and the affected party is given an opportunity to present their case. However, it is best to avoid suspension or cancellation, as such actions can severely damage a business's reputation and market position. Therefore, obtaining and maintaining a valid PSARA license is crucial for continued operations.